P&C Insurers Will Spend More in 2010

Something is better than nothing. This mantra may describe be the silver lining in P&C insurers budgets for 2010 if research from industry experts is correct. Analysts are reporting 2010 P&C IT budgets to be flat or slightly higher than 2009. Gartner and the Property Casualty Insurers Association of Americas (PCI) fourth annual joint Information Technology (IT) spending survey found that the planned IT spending increase from 2008 to 2009 is 1.6%. And, based on the data collected, the planned increase in spending from 2009 to 2010 will only be around 0.2%. Looking forward to 2010, Matthew Josefowicz, director of insurance at Novarica, says large P&C insurers are foreseeing mostly level or slightly higher budgets, while midsize P&C companies, which saw slightly greater increases for 2009, are slightly more conservative. This slight increase is expected despite the fact that companies are, on average, predicting a decrease in revenue of 3.7% from 2008 to 2009, according to Gartner and PCI. Companies responded that for 2008, 59% of IT spending is dedicated to lights-on support, while the remainder of the IT investments are dedicated to support business growth and transformation. This pattern of holding steady from 2008 indicates that even with a tough economy, these companies are still making some investment in the future, says Eric Stegman, research director, Gartner. This article can also be found at InsuranceNetworking.com.